Good news for those that will be traveling to Greece: Reduced VAT Rate Begins August 1, 2013.

Value-added tax (VAT) on Greek food services will be set at 13 percent (from 23 percent) as of 1 August, 2013, at restaurants, bars, taverns and hotels.

In regards to catering services in hotels, since the VAT on hotel services is at the reduced 6 percent rate, when services are provided for a unified price, the following will apply:

1. Accommodation with breakfast: The 5 percent of the unified price is subject to the reduced VAT rate of 13 percent for the price paid for breakfast.

2. Accommodation with half board: The 15 percent of the unified price is subject to the reduced VAT rate of 13 percent for the price paid for breakfast and lunch.

3. Full-board accommodation: The 25 percent of the unified price is subject to the reduced VAT rate of 13 percent for the price paid for breakfast and two meals.

4. All inclusive accommodation:
– The 65 percent of the unified price is subject to the already reduced VAT rate (for hotels) of 6.5 percent for the price paid for accommodation.
– The 25 percent of the unified price is subject to the reduced VAT rate of 13 percent for the price paid for catering services.
– The 10 percent of the unified price is subject to the standard VAT rate of 23 percent for the price paid for the consumption of alcoholic or non-alcoholic drinks and other benefits of the package.

In general, the VAT rate on food services is set at 13 percent regardless of where food is consumed. The only exception to the new VAT rate will apply in the drinks category, depending on whether goods are consumed in restaurants and bars or ordered for take-out.

Mini-Bar for hotels, if a beverage is consumed from a room’s minibar, the VAT rate will be the standard 23 percent, but if room service brings the same beverage to the room it will have a 13 percent VAT rate.